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LatinNews Daily - 29 November 2022

In brief: El Salvador moves on pension reform

*El Salvador’s congress president Ernesto Castro, of President Nayib Bukele’s Nuevas Ideas party (NI), has announced the creation of an ad hoc 11-member committee tasked with analysing President Bukele’s proposed pension reform. Reforming El Salvador’s pension system, which is currently privately managed by Administradoras de Fondos de Pensiones (AFP), privately run pension fund administrators, was a major pledge by President Bukele upon taking office in June 2019, and unions have long called for the system to be nationalised. Currently the amount paid into the pension system is 15% of workers’ salaries (of which employers contribute 7.75% and the employee the remainder). The proposed reform, which President Bukele sent down to congress on 25 November, would see employers contribute 8.75% of workers’ salaries while workers’ contributions would remain the same. Castro also said that under the government’s proposal, the current minimum monthly pension (US$304) would rise to US$404 while the 2% commission currently received by AFPs would drop to 1%. President Bukele’s proposal has, however, been rejected by unions such as the judicial officials’ union, Sindicato de Empleados y Empleadas Judiciales (SEJES), which complain that it does not go far enough, and they have not been consulted.

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